The Special Agricultural Processing Zone (SAPZ), a laudable initiative of the African Development Bank (AFDB) implemented in 18 African countries is expected to gulp $538 million in Nigeria with funding from the AfDB and the Islamic Development bank.
Many who celebrate this initiative may not know that this project was initiated and launched in 2013 as Staple Crop Processing Zone (SCPZ) by the then Minister of Agriculture and Rural Development and the current President of AfDB, Dr Akinwumi Adesina.
The project was flagged off by Dr Adesina in Alape, Kabba Bunu, Kogi State in January 2013. The first crop targeted was cassava in Alape, to be managed by Cargil American Food Processing Company. The target was to generate N14.5 billion income.
Adesina envisaged that the developed Zone would produce 62,000 mts of starch, 45,000 mts of sweeteners to replace some of the sugar used, contributing the sum of N14. 5 billion income as well as create additional 8000 jobs for the youths”
He said “Nigeria is the number one producer of cassava in the world and must become the number one in cassava processing”. Adding that Nigerians must feed themselves and not rely on anybody to do it for us”
At that time, it was envisaged that the successful implementation of the SCPZs is estimated to potentially add N660 billion to N1.4 trillion to the Nigerian economy and create up to 250,000 jobs.
The SCPZ development is a major investment project driven by the Federal Ministry of Agriculture and Rural Development as a critical component of the Government’s Agricultural Transformation Agenda (ATA).
It includes the construction, development and operation of agro-processing clusters located in areas of high-food production across the country.
The objective of the SCPZ is to reduce the cost of doing business for agro-processors to ensure their competitiveness, and to create ready markets for Nigerian farmers, thereby reducing post-harvest losses. The SCPZs therefore provide the missing link between agriculture and the industrialization of Nigeria’s economy.
The SCPZ plan also includes the establishment of Agro-Industrial Towns around the SCPZs that will provide employment for millions of households in the surrounding areas.
Working in partnership with state and local governments and the United Nations Industrial Development Organisation (UNIDO), development master plans were prepared and presented to stakeholders in six priority states with potential SCPZ sites; Kogi, Lagos, Kano, Anambra/Enugu and Niger.
It was also planned that 14 SCPZs will be set up across Nigeria around rice, sorghum and other grains, cassava, fisheries, horticulture and livestock.
The Alape SCPZ in Kogi State is being piloted as a Centre of Excellence for Cassava production and processing. Private investors showed interest in this SCPZ, with global agribusiness powerhouse Cargill, exploring establishing a cassava processing facility in Nigeria. Senior representatives from Cargill were on site for the launch.
In addition, Dansa Foods of the Dangote Group, in Kadawa, were expected to be begin processing tomatoes and rice as an anchor investor in the Kadawa SCPZ in Kano State, and Flour Mills of Nigeria has commenced plans to process Cassava for flour and sweeteners in the Ososa SCPZ, Ogun State.
In 2014, the then Permanent Secretary, Ministry of Agriculture and Rural Development, Mrs. Ibukun Odusote while receiving a draft report of Agro-Industrial Town (AIT) in the Agribusiness investment region (ABIR) of Alape Staple Crop Processing Zone(SCPZ) in Kogi State, said the Federal Government has designated a large area of about 30 km radius to the SCPZs for the production of agricultural raw materials to feed the SCPZs.
She said the AIT which will create about 23,000 jobs is aimed at “establishing a new concept of agricultural village, setting primarily targeted for farming households with provision of land for agricultural production, housing, water supply, agro-support services”.
She therefore highlighted the advantages of the AIT to include the creation of mechanised oriented farms, enhanced economic growth, improved technical and rural management support, job creation, rural-agro transformation and the production support services with appropriate agribusiness linkages to the SCPZs.
Also in 2014, the Nigerian government secured a $100 million German Development Bank equity to boost SCPZs
The German Company will be investing over $100 million for the establishment of a 65,000 Metric Tonnes (mt) starch plant in one of the Staple Crop Processing Zones (SCPZ).
The then Minister of Agriculture and Rural Development, Dr Adesina noted that national food production increased by 15 million mt within two years, adding that Nigeria is ahead of the four-year target of 20 million mt by 2015.
“The reforms we have made are capturing the attention of external investors. Over the past 24 months, we have attracted $4 billion in executed private sector letters of commitment to invest in our agricultural sector.
“The World Bank, African Development Bank and other development finance institutions plan to commit up to $ 1 billion towards the development of the Staple Crop Processing Zones. A leading international company is also considering investment of over $100 million for the establishment of a 65,000 MT starch plant in one of these zones.
“To drive and provide much needed equity financing for small and medium scale agribusinesses, the Federal Ministry of Agriculture and Rural Development, the Federal Ministry of Finance and the German Development Bank, KFW, have jointly established a $100 million equity and quasi-equity fund,” the minister said in a statement made available to reporters in Abuja.
Furthermore in 2014, the AfDB voted for $150 million to boost rice production in Nigeria. The Chief Operations Officer, AfDB, Dr. Patrick Agboma disclosed this at the opening of a 2-day stakeholders workshop on AfDB Pre-Appraisal Mission on RVCDP, in Abuja.
The support is coming through the bank’s Rice Value Chain Development Programme (RVCDP).
Agboma said: “It is well known that the AfDB has committed $500 million for the ATA over the next three years but for this programme maybe up to $150 million could be put up.”
The Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Mrs. Ibukun Odusote said that the programme will be implemented at six Staple Crop Processing Zones (SCPZ) across the country.
She added that the centres will be located in areas where there are high potential for production of the selected crops.
Odusote who was represented by Director, Federal Department of Agriculture, Dr. Julius Odeyemi stated that 13 sites have been designated for the first set of SCPZs for rice, cassava, sorghum, aquaculture and horticultural crops.
In 2015 when Dr Adesina became the President of AfDB, he kept the hope alive for the SCPZ after ceasing to be the Nigerian Minister of Agriculture and Rural Development.
Upon assuming office as the President of the AfDB, Dr Adesina established the Agricultural Transformation Agenda Support Program Phase I, (ATASP-I) whose primary agenda was to continue the implementation of the SCPZ.
In 2015, the then National Coordinator of Agricultural Transformation Agenda Support Program Phase I, (ATASP-I) Mr Haruna Akwashiki, said that the AfDB is making available loan and grants in the value of $326.97 million to fund the Staple Crop Processing Zones (SCPZs) in four location in Nigeria.
He explained that the program will be implemented in 5 years and is estimated to cost $174.85 Million, with $152.12 Million and $0.385 Million financed from Agricultural Development Fund (ADF) loan and grant resources respectively in four staple crop processing zones of Adani-Omor, Bida-Badaggi, Kano-Jigawa and Kebbi-Sokoto.
He further explained that the program will cover 28 LGAs in seven states of Anambra, Enugu, Kano, Kebbi, Jigawa, Niger and Sokoto adding that these states cover 194,426 square kilometers of land and a population of 32,121,944 inhabitants who are predominantly farmers.
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Mr Akwashiki said the ATASP-I loan was signed on 22nd May, 2014, “the loan was declared effective on 20th February, 2015 and was launched on 6th march, 2015 at IITA station Kubwa”.
Now, the recently launched Nigeria Special Agro-Industrial Processing Zones (SAPZ) is expected to facilitate the establishment of eight agro-industrial Processing Hubs, 15 Agricultural Transformation Centers, 2,300 ha of irrigated lands and access roads.
The programme is also expected to supply certified agricultural inputs and provide extension services; training and skills development activities for farmers and SMEs.
Looking at the objectives of the SAPZ, you could see similarities with the SCPZ. The difference is that the SAPZ is driven by the AfDB, while the SCPZ was initiated and driven by the Nigerian government with funding from development partners.
The Director General of AfDB Nigeria, Mr. Lamin Barrow while speaking at the Strategic Partners and Investors Meeting of the SAPZ said the project has a total investment target of $538 million which would be co-financed by African Development Bank, the International Fund for Agriculture Development and the Islamic Development Bank.
He said the Nigeria SAPZ Program is the largest among the SAPZs currently being rolled out in 18 African countries, both in terms of size and scope. Phase I, which will be implemented in 7 States – Cross River, Imo, Kaduna, Kano, Kwara, Ogun and Oyo and the Federal Capital Territory.
Barrow noted that the Strategic Partners and Investors Forum is designed to provide a platform for interactive exchanges for the representatives of key stakeholder groups involved in the SAPZ Program which include the concerned Federal and State Governments, Strategic Partners, Investors and other private sector actors
He said the meeting is to enable in-depth discussions on the implementation modalities for delivery of SAPZs in Nigeria.
Barrow further stated that the 5 year Program will support policy and institutional development for SAPZs.
“The private sector has a critical role to play in the SAPZs, and we are pleased that several private sector firms, domestic and foreign, have expressed keen interest to be located in these zones.
“The implementation of the SAPZs through a public-private partnership framework is therefore anchored on a clear division of labour among the actors;
“The Public sector: to undertake investments for rehabilitation and construction of basic infrastructures, including Aggregation Centres and Agricultural Transformation Centres to aggregate and process the strategic crops and livestock products, including rice, cassava, maize, groundnut, sesame, tomato, sorghum, soybeans, cocoa, poultry, beef and dairy” , he stated.
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